Comments about ‘Letters: Rubio's remarks false’

NPR's Planet Money team did a fantastic series of investigations several
years ago on the housing market collapse. And you're right, the private
sector shares a large part of the blame here. Readily approving people for
mortgages they could never afford and without doing any income verification.
Bundling thousands upon thousands of subprime mortgages into securities and
selling them back and forth at incredible profits. It was an unhinged frenzy and
companies were raking in the profits. Some companies knew this was a terrible
idea and would collapse, decided to bet against the market, and then
underhandedly encouraged other companies to continue this risky lending to help
ensure the market would collapse so they would get huge payoffs. It was
capitalism gone completely amok and a great example of how laissez faire
policies can leave incredible damage in their wake.

But there are two
sides to the coin. No one forced millions of homeowners to accept enormous
mortgages beyond their income. The lending institutions may have approved them,
but they signed the forms chaining them to variable rate mortgages on homes they
should have known were out of their reach.

Somebody's been reading too much Paul Krugman - that stuff will disconnect
you from reality.

And speaking of reality, government regulations and
pressure - most notably under the Community Reinvestment Act - were in fact the
major contributors in creating the climate of easy money in the subprime lending
industry that took off on the mid 90's. Yes, many other fctors were
involved in the subprime crash, but blaming it all on "greed" is just a
lazy leftist talking point. Greed has been around for a long, long time, and
will always be around in the banking industry just as in every other industry;
it's human nature. That wasn't the unique factor causing this
particular crash.

Government pressure really took off in the early
90's as banks were pushed to lend to borrowers who clearly didn't
qualify. Not all banks suffered this pressure, but enough did to completely
distort the market since mortgage lending is such a competitive industry that
behavior by a few banks changes everyone else's; it has to, or they
don't survive.

And bank profits only "took off" after
such pressure was applied; profits were flat throughout the mid 90's to the
crash.

The housing bubble and subsequent crash were a market failure. Republicans
can't admit that market failures exist, so they had to invent an alternate
history to explain it all. Their history has a few grains of truth, but the
fundamental cause was thirty years of financial deregulation which lead to the
financialization of every aspect of our economy.

If deregulation had
not enabled banks to create Collateralized Debt Obligations, Credit Default
Swaps, Derivatives and a myriad other products, none of it would have been
possible.

If U.S. government regulations caused the crash, then why
did Spain, Britain, Ireland, Iceland, Estonia, etc. all go through similar
bubbles and crashes at the exact same time?

Not to
true-believing leftist academics. Particularly those in the soft
"sciences," who have no real fear of meaningful criticism. In their
fields, one theory's as good as another, since there's no real way to
prove or disprove an investigators' hypotheses.

They clearly
feel a curious need to disingenuously justify and excuse abject liberal
failures, cynically blaming them on those least responsible. It's their
vain attempt to defend policies and practices that have an unbroken record of
miserable failure.

It allows them to avoid the introspection and
self-examination real people believe is important.

Years of flat
wages – According to the census, in 2003, 2004, 2005, 2006 wages GREW by
1.54%, 3.22%, 5.59%, and 5.42% respectively across all incomes; and for the
lower 40%, they grew by 0.8%, 2.19%, 4.27%, and 5.57%, respectively, PLUS 2.15%
in 2007 when general wages shrunk. Growth does not equal flat.

Feeding profits that landed in banks. – finance officers deposit money
in banks earning 0.15% when they could pay dividends or buy back shares and
increase the ROE? Sorry, not buying it.

Banks needed to do something
with corporate profits so they pushed bad mortgages on people. Who held the gun
forcing people into unaffordable mortgages?

Banks DID push loans,
but only because barney frank forced Fanny and Freddie to lower the standard for
secondary market loans, meaning more people could “qualify” for
loans. Banks made the commission on the loans, which they then dumped into the
secondary market. An unnatural increase in mortgages created the bubble; when
it burst, it brought down our economy.

Voice of Reason..Community Reinvestment Act? That is the laziest of talking
points. Look at your own argument in comparison to Emajor.."And bank
profits only "took off" after such pressure was applied; profits were
flat throughout the mid 90's to the crash." Just what was that
pressure? It wasn't the government. Low interest, and programs to promote
home ownership had been around forever..as you say. What was the pressure..it
was simply opportunity. The opportunity to take massive profits put them in an
instrument where the risk was first of all passed on and then broken up until it
was entirely hidden. Wall Street firms literly imported russian physicists to
create the mathematical models that built the financial instruments that housed
the securitized mortgages. Yes greed has been around forever but the ability to
distort that greed to personal advantage reached new heights in the mid
2000's thanks to creativity and no oversight.

Government regulations were partially to blame for the housing bubble and
collapse, but so were a lot of other factors. To lay the blame solely on
government is wrong.

But so is trying to lay all the blame on big
banks and greedy wall street executives. President Obama and other Democrats
have done that repeatedly. Do you call them out on that like you just did to
Senator Rubio?

If you did, then you are a fair-minded person. If you
didn't, then just another partisan rant.

Failure to understand the mistakes made will greatly increase the chances of a
repeat.That said, how many people really, I mean REALLY want to know what
caused the banking meltdown?

Looks to me that most will readily
accept any explanation that exonerates their party and puts the blame squarely
on the other one. Truth has very little to do with it.

Hate to break
it to you, but greed is usually at the heart of most of these types of problems.

- Greed by the politicians to get donations. (yes, both R and D)
- Greed by the banking industry to make more and more money- Greed
by homeowners who thought housing would go up forever.- Greed by the
mortgage lender on commission- Greed by the appraisers

You're a little confused, Lew, and you're trying to obviscate the
truth.

The truth is, former Senator Chris Dodd and his Democrat
friend in the House, the former Congressman Barney Frank eased the requirement
for the purchase of homes so that even the poorest among us, and those who
couldn't make monthly mortgage payments could qualify for a mortgage. This
looked fairly workable as the housing market had continued to rise for decades
so that, even if a buyer defaulted, the property could easily be disposed of for
a profit to the seller (or the bank repossesser). Then, when these people
started defaulting on payments and the market became flooded with unsold units
it started to collapse.

The cause was not soaring corporate profits
as you seem to think. Any soaring profits would not end up in banks but would
be paid as dividends to stockholders as they should be. And even if the soaring
profits ended up in banks, so what? Banks cannot push mortgage loans onto
people in violation of governing laws.

You Democrats will try almost
anything to get out of responsibility for the worst financial disaster in
decades.

Rubio did not "lie", just took a one sided view of the crisis that few
on either side would subscribe to. "Greed" is not a problem of the left
or the right, it is a human problem. There is no one cause for the bubble
breaking unless you want to say it was greed. Politicians, bankers, mortgage
brokers paid on commission, rating agencies, insurers will to guarantee sub
prime loans when made into collateralized bonds, cash strapped homeowners,
people seeing "easy money" to be made by "flipping" properties.
There is plenty of blame on all sides here. Everyone wanted their piece of the
pie and until the bubble burst they got more pastry than they could eat.

No. no. Lawmakers make laws to control markets so
failures don't occur. So, if there's a blame it's poorly
thought-out laws. And who makes those laws? The government. And who in the
government pushed those laws? Democrats Chris Dodd and Barney Frank, leaders of
their respective finance committees in the Congress, that's who. And what
were those laws? Allowing/pushing home ownership through sub-prime loans. And
what are sub-prime loans? Loans to buyers who are at risk of being able to make
monthly mortgage payments... examples were folks such as those who were on
federal unemployment rolls.

"If U.S. government regulations
caused the crash, then why did Spain, Britain, Ireland, Iceland, Estonia, etc.
all go through similar bubbles and crashes at the exact same time?"

Because many of those countries invested in sub-prime loans or associated
collateralize debt obligations... much to their dismay.

"Government pressure really took off in the early 90's as banks were
pushed to lend to borrowers who clearly didn't qualify."

Give me a break. No one mandated anything. A customer of mine, BB&T,
which holds over 95% of its own paper, didn't write risky loans - it was
their own choice to not do so. It was the ability of lenders to monitize
bundles of loans where the value of the bundled portfolio of these new
investment vehicles was dubious. When you able to hide high risk paper in with
quality paper, then turn them into exchangable equities with little
transparency, that was the green light to some lenders to cash in on a deeply
deregulated industry. There was little accountability to trh originators.

As to Rubio, I felt for the guy. He was presenting his rebuttal without
the benefit of actually seeing the initial case being made. Regardless of side,
these rebuttals are so generic in nature they are many more times a waste of
energy than the SotU is. They have no context other than standard talking
points. It really wasn't his fault.

Ivan Boesky was wrong. Greed is not good. Conservatives keep trying to spin it
so that greed is a positive thing, but theirs is an uphill argument.

There was a time in America (between the Revolution and the Civil War) when
government chartered corporations to serve public purposes. The Founders had had
too much experience with the British East India Company and other corporations
and did not trust that particular form of business. So they chartered
corporations warily and to serve a specific public purpose, and generally
corporations were chartered for 20 or fewer years. The railroads changed all
that, and eventually they bought enough judges to get corporations declared
"persons."

The result is, well, the mess we have today, where
greed is rampant and corporate values have devoured most of society. Can we
reverse the trends that have been dominant since the 1860s? Probably not. Maybe
economic collapse is the only solution. Then, perhaps, we can learn from our
mistakes and devise an economy that does not enthrone self-interest, which, by
the way, Adam Smith viewed as the hallmark of a suboptimal or mercenary economy.

Bluedevil,It was pressure by barney on fannie and Freddie that allowed
banks to monetize bundles of loans. two weeks before fannie and freddie failed,
barney said they were sound. Denying barney forced them to anything is smiply
not true.

Emajor,Thanks for just calling names and not even
trying to rebut what I said.

Let’s take a look at the result of
an ill-conceived law, shall we?

One of the purposes of dudd-frank
was to end too-big-to-fail. Did you see the article in the arch-conservative
rag “Rolling Stone” (sarcasm off) about how BO’s injustice
department is failing to prosecute ANYONE at HSBC involved in the recently
uncovered money laundering operation there? The reason the injustice department
gave? HSBC was systemically too important, prosecutions would have caused
another banking crisis.

So the dem bill (few if any repubs supported
dudd-frank) FAILED miserably to end TBTF and allowed known money launderers,
supporting al qaeda and Mexican drug lords, to walk scot-free.

@Voice of ReasonOf course it was greed. The entire bubble was caused by
greed. Greed from the banks, who wanted to make money selling those mortgages.
Greed from homeowners, who wanted a house without paying any money down and with
an artificially low monthly payment because of non standard loans and greed by
getting a bigger, more expensive house than they could afford. Greed by the
government, because they wanted to keep getting elected and keep their cushy
elected positions. It's not unique to this bubble, but this bubble was
caused by greed.

Greed has
synonyms... for example 'eagerness.' Try thinking of it as
'eagerness.'

I suppose you'd be eager to maximize your
wages, wouldn't you? Could you use more income? Do you think of that as
'greed?' I wouldn't think so...

Now, think of the CEO
of a corporation. His job is to maximize income to the investing stock holders.
As a stockholder, I appreciate the CEOs' eagerness to accomplish corporate
goals.

"The railroads changed all that, and eventually they
bought enough judges to get corporations declared 'persons.'"

The reason the judiciary declared corporations as 'persons'
basically is so that it can sue and be sued. Perhaps it would dispel any
anxiety you feel to know that, even though a corporation is a 'person'
it can't vote, marry, make love, or do alotta things a 'person'
can do. Corporations can only conduct business activity according to their
corporate charter filed with the state of incorporation.

"Then,
perhaps, we can learn from our mistakes and devise an economy that does not
enthrone self-interest.."

Inone line its - The
government ALWAYS gets it wrong, they need to get out, and let the free markets
decide.then it'sThe Government didn't over-see enough of
the lending practices and deregulated too much.

The flip-flopping is
astounding.

It's no wonder at all why they chose Mitt Romney,
and it's no wonder they keep loosing elections.

@Open Minded Mormon:"In one line its - The government ALWAYS gets it
wrong, they need to get out, and let the free markets decide."

If
the government get's it wrong it usually can be attributed to Democrats
like Harry Reid and Nancy Pelosi (who says they have to pass a bill before they
know what's in it).

"Then it's... The Government
didn't over-see enough of the lending practices and deregulated too
much."

No, no. It wasn't deregulation. In the case of the
recent real estate debacle, is was... Democrats pushing housing regulations...
that allowed banks to issue sub-primes, then bundle them to pass them to
government entities such as Fannie Mae and Freddie Mac.

"The
flip-flopping is astounding."

I think you're talking about
Obama... who pushed for sequestration several years ago and now is vehemently
against it. Good grief!

"It's no wonder at all why they
chose Mitt Romney, and it's no wonder they keep loosing elections."

Romney lost because he was against abortion, illegal immigration,
amnesty, and gay marriage... issues Obama and his Democrat friends support.
Yuk!